Michael Portillo has warned that the Conservative Party is "in grave peril".

Officially launching his campaign to succeed William Hague, the shadow chancellor urged his fellow Tories to embark on a journey of change.

Our party is now in grave peril

Michael Portillo

Speaking without notes to an audience of supporters at a West End restaurant, Mr Portillo issued a challenge to the Conservatives to become what he called "the party of ideas".

In the aftermath of two "stunning defeats", he called for the largest re-assessment of Conservative Party principles in a generation, saying "our party is now in grave peril, in grave danger of what may happen
next".

His personal statement of beliefs comes as Tory party chairman Michael Ancram prepares to become the fourth challenger to enter the race.

Principles

Keeping upbeat the current front runner expressed his confidence in the party's ability to change, "because it has no doubt about its underlying principles".

"I want the Conservative Party to be for things, I want it to be for people," he said.

He was joined at the launch by his campaign manager Francis Maude, the shadow foreign secretary, and other supporters - including Stephen Dorrell, Nicholas Soames and MEP Theresa Villiers - intended to show backing for Mr Portillo from a broad range of Tories.

In all humility we must be willing to look to other examples broad

Michael Portillo

On the subject of his rivals for the Tory crown, Mr Portillo sought to steer the campaign away from personalities, insisting that he would not attempt to talk them down.

"I am pleased that there is a growing field of candidates," he said, adding: "I did not want William Hague to resign... it was a pleasure to be on his team."

Looking ahead to a leadership battle which will last most of the summer, Mr Portillo said: "I want this leadership campaign itself to be the beginning of the process in which we start to learn, in which we start to think, and which we start to prepare for change."

It was vital that the Conservatives connect with the people: "Our party needs to immerse itself in thinking about how we can improve the delivery of public services."

The real world

His own defeat in Enfield Southgate at the 1997 general election had some beneficial effect as "it did mean that at that time I was forced to re-enter the real world".

He said this had given him a greater insight into the aspirations of real people, and he urged his party to enter into a debate both with those inside and outside politics, as well as inside and outside the Tory fold, to bring in fresh ideas.

When it came to the health service - a key issue in the election campaign, and one which the Tories lagged behind Labour on in terms of who the voters had greatest trust in - Mr Portillo said: "In all humility we must be willing to look to other examples abroad."

He again underlined his opposition to the single currency, but made clear his support of the European Union.